Microsoft announced this week that it has forced a UK software dealer to cease trading, following an investigation in conjunction with the police and trading standards bodies.
In an out-of-court settlement, William Ling, proprietor of Oyster Computers, New Malden, Kingston-upon-Thames, agreed to pay Microsoft a substantial sum and has given an undertaking not to sell counterfeit software in the future.
Ling was first arrested by police in February 2003, and his premises searched, following a tip-off. Documents seized at the time showed details of his £3.5m trade in counterfeit and unlicensed software, according to Microsoft. He was later re-arrested when he resumed illicit trading, Microsoft said.
Michala Alexander, head of Microsoft's anti-piracy programme in the UK, said that Ling's activities will continue to be monitored in case he attempts to sell unlicensed software again.
Alexander added that Ling's connections to a wider illegal software trade are also being investigated. "There is a trail, and we have it traced back to Czech Republic, so it's a case of watch this space. Getting Ling is a great success, but there is still a lot more to do as regards who he was working with," she said.
"This is about the wider UK economy. The longer someone like Ling stays in business, the more legitimate resellers are threatened," Alexander said.
When contacted by ZDNet UK, Ling confirmed that he had reached a settlement with Microsoft, and would no longer be selling software. "I'm not going to fight with them [Microsoft]," he said. He added that he was continuing to sell "TVs and Sky TV".
Alexander suggested that there may well be more UK prosecutions as a result of the evidence collected in connection with Ling's business.
Despite the fact that Microsoft is attempting to get hold of Ling's customer records, the software giant has no plans to go after companies or individuals who may have bought illegal software from him. Instead, it will contact them to offer help and advice on purchasing legitimate software, said Alexander."We are not going to prosecute customers, but will help them get to the right place," she added.
Around 30 percent of counterfeited Microsoft software has been "tampered with", which means it could damage a user's PC, Alexander said. "I can't definitely say that it has been infected with spyware or malware, but there is definitely that chance."
According to figures from Microsoft, Ling had sold products for far less than the market price in all but 43 of 1,296 sales, showing that he was dealing in counterfeit or unlicensed products. He was allegedly selling a 3-pack of Windows XP, which normally retails for around £170, for £55.
Following his arrest in 2003, Ling was subsequently charged with a number of offences under the Trade Marks Act of 1994 for knowingly dealing in counterfeit and unlicensed Microsoft products. He pleaded guilty, and in May 2005 was made to pay £10,000.
But, according Microsoft, within two months Ling had resumed trading in counterfeit and unlicensed products. As a result, Microsoft launched a civil damages claim for £12m, the amount of revenue the company claims it lost as result of Ling's illegal trading.